This put the site in the crosshairs of the entertainment industry, with Paramount Pictures branding it as one of the main sites to be targeted following the Megaupload shutdown.

While FileServe is still around, the site has undergone some drastic changes to its business model since its heyday. Immediately after the Megaupload raid the company changed its policy to only allow users to download files they have uploaded themselves.

As a result of this decision traffic to the site tanked, but not all of the site’s troubles went away. Last year the production company behind the independent movie American Cowslip filed a lawsuit at a federal court in California.

The movie studio filed a motion for summary judgment last month, after the Virgin Islands-based file-hosting service failed to respond to the allegations. In the motion, FileServe was accused of a wide variety of copyright related offenses, including selling pirated goods through subscriptions.

“FileServe is aware that its websites are being used as a vehicle to illegally copy and distribute large amounts of infringing materials. Because it charges membership fees for immediate access to the copyrighted materials stored on its servers, it is a distributor and seller of pirated materials,” the complaint read.

Yesterday, District Court Judge Audrey Collins decided on the case and entered a judgment in favor of American Cowslip, holding FileServe liable for copyright infringements committed by its users.

The file-hosting service is now ordered to pay $869,500 to compensate the movie studio for the alleged piracy losses, and an additional $20,990 in attorney’s fees

The damages sum is entirely based on an estimate the movie studio came up with. Based on revenues of comparable movies the company ran a statistical forecast model which predicted that American Cowslip should have generated more than a million in revenues in North America, as opposed to the $68,000 it actually made.

While these calculations raise several questions, the judge had little other option than to accept it, since FileServe failed to weigh in.

Whether the movie company will ever see a penny has yet to be seen though. FileServe never responded to the complaint, and it would be a surprise if the Virgin Islands company changed its stance when the bill arrives.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

While these cases differ in nature, all companies have been accused of facilitating piracy through their services.

Last year FileServe joined the growing list when the makers of the independent movie American Cowslip filed a lawsuit at a federal court in California. The movie producers accused FileServe of a wide variety of copyright related offenses, including selling pirated goods through subscriptions.

“FileServe is aware that its websites are being used as a vehicle to illegally copy and distribute large amounts of infringing materials. Because it charges membership fees for immediate access to the copyrighted materials stored on its servers, it is a distributor and seller of pirated materials,” the complaint read.

The Virgin Islands-based file-hosting service has thus far failed to respond to the allegations, which prompted the movie studio to file for a default judgment. This motion, submitted to the court a few days ago, asks for $869,500 in piracy-related damages.

In a declaration in support of the motion, American Cowslip producer Tony Hewett gives an example of the massive infringement that allegedly occurred on FileServe’s services. The producer lists statistics from a now defunct linking website, fileserv.com, which shows nearly 20,000 downloads.

“The accounting shows 19,928 downloads of American Cowslip. Cowslip Film Partners LLC did not authorize any of those downloads,” American Cowslip producer Tony Hewett writes.

What the producer fails to mention and perhaps isn’t aware of, is that these numbers are usually fabricated.

Based on revenues of comparable movies the producer also ran a statistical forecast model which predicts that American Cowslip should have generated more than a million in revenues in North America, as opposed to the $68,000 that it actually made.

According to the movie studio this revenue gap can be largely attributed to piracy so it wants FileServe to pay the difference. This arrangement appears to ignore potential losses ‘generated’ by all other piracy sources.

“Based upon our forecast of a minimum $1,250,000 for North America, and discounting that by 25% on the chance that the film would never be well-received by the public, it is my opinion that Cowslip Film Partners should have receive [sic] not less than $937,500 from North American distribution,” Hewett notes.

“Because receipts from North America were only $68,000, I attribute damages of $869,500 to the FileServe piracy,” he adds.

The judge now has to decide whether this amount will be awarded. Since FileServe isn’t defending itself the file-hosting service is bound to lose. But even when that happens it’s still unsure whether the movie studio will ever see a penny.

For FileServe this is not the fist time it has been targeted in the US. Last year Paramount Pictures’ vice president for worldwide content protection identified the file-hosting service as one of the prime candidates to be shuttered next as part of any future U.S. Government action.

Cowslip Film Partners previously sued Megashares in a similar lawsuit. The case was settled last year but the terms were not disclosed.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The movie producers accuse FileServe of a wide variety of copyright related offenses, including inducement and contributory infringement. According to the complaint FileServe’s business is based on selling subscriptions to pirated material.

“FileServe is a website that sells access to large amounts of unauthorized intellectual property to the public, including California residents, without paying the rightful owners of that property,” the filmmakers write.

“FileServe is aware that its websites are being used as a vehicle to illegally copy and distribute large amounts of infringing materials. Because it charges membership fees for immediate access to the copyrighted materials stored on its servers, it is a distributor and seller of pirated materials.”

Under this general characterization pretty much every cloud hosting service could be branded a ‘pirate site’. The producers add, however, that they have advised FileServe that it was offering infringing copies, but that the infringements continued nonetheless.

“Between March 31, 2011 and February 7, 2012 Cowslip sent FileServe notices by letter and email advising FileServe that it was infringing upon Cowslip’s copyright in the work. Despite such notices, defendants’ infringements did not cease,” they write in the complaint.

Whether these notices where in the form of proper DMCA takedown requests and whether specific files were pointed out is unknown.

Cowslip Film Partners believes that FileServe is responsible for the distribution of the pirated copies and demands a jury trial. The movie producers want to see $1,000,000 in damages as well as the maximum $150,000 in statutory damages for each infringement.

The current lawsuit does come as a surprise considering that the cyberlocker no longer allows users to share files in public. Immediately after the Megaupload raids last year the company changed its policy to only allow users to download files they have uploaded themselves.

Whether this will change anything for the pending case has yet to be seen.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

It’s clear that site owners are concerned that their business might become a target, and if it’s up to the major movie studios this fear is justified. “We continue to make criminal referrals,” Paramount Pictures’ Alfred Perry said during the On Copyright conference in New York yesterday.

CNET reports that the Paramount Pictures produced a list of five “rogue” file-hosters, presented in a fancy graphic where Megaupload is crossed out. The prime targets on this shutdown list are Fileserve, MediaFire, Wupload, Putlocker and Depositfiles.

The movie studio claims that these “rogue” cyberlockers receive 41 billion page views a year, which translates to five views for every person on the planet.

In recent months the MPAA has criticized the business models of these and other cyberlockers on many occasions.

Last November, for example, we got our hands on an MPAA fact sheet titled“It’s All About the Money: The ‘Business’ Model of Rogue Cyberlockers” with an overview of the several affiliate programs some cyberlockers have in place. According to the MPAA these programs motivate users to share copyrighted material, thereby promoting piracy.

“Rogue cyberlockers aren’t just distribution hubs for stolen movies and TV shows – both the users who upload content and the operators who run the sites can earn money from doing so. As Internet video traffic grows, the threat from rogue cyberlockers that profit from stolen content is rising rapidly,” the MPAA explains in the document.

This fact sheet will most likely be forwarded to the Department of Justice with every new “rogue” cyberlocker that the MPAA reports.

Whether the Department of Justice will act on new referrals from the movie studios has yet to be seen. For now they have their hands full on Megaupload, whose founder told TorrentFreak that his defense teams is working on a killer motion in response to the “nonsense” US indictment.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Over the past 48 to 72 hours, the operators of many prominent cyberlocker services have been taking unprecedented actions that can not simply be explained away by mere coincidence. The details in the Megaupload indictment clearly have some players in the file-hosting world spooked.

One of the key allegations is that between 2005 and mid 2011, Megaupload ran a program that rewarded users for uploading infringing material. A cited internal email allegedly shows staff members discussing cash payments going to people uploading “full popular DVD rips” and “software with keygenerators (Warez)”.

Although Megaupload stopped paying out rewards in July 2011, that didn’t stop the site from getting raided. Other cyberlocker services are clearly hoping they will be more lucky.

Last evening Filesonic, a top 10 player in the file-sharing world with a billion pageviews a month, not only withdrew its affiliate rewards program, but also banned any third parties downloading files. Simply put, users can now only download files from the service that they uploaded themselves.

But according to reports, there’s no guarantee of that. Account owners report that their files are being mass deleted, that’s if their entire account hasn’t been banned already.

Fileserve, another leading player, also ended its affiliate program this weekend. Additionally, this morning TorrentFreak received news that Fileserve has now joined Filesonic in banning all 3rd party downloads.

Other users of Fileserve are experiencing an even further degraded level of service. Reports describe mass deletion of their uploads and the banning of accounts on apparent ‘Terms of Service’ violations.

As previously reported, Uploaded.to banned all US IP addresses in what appears to be an effort to distance itself from US jurisdiction. Its affiliate program is still listed as operational but the same cannot be said about those run by some of its competitors.

VideoBB and VideoZer have both reportedly closed their rewards program and according to reports have also been mass deleting accounts and huge numbers of files.

Other sites closing their affiliate programs and/or deleting accounts/files include FileJungle, UploadStation and FilePost.

Do you know of other file-hosts/cyberlockers taking similar action? Send us your stories and screenshots to the usual address.

Update: Smaller host UploadBox calls it quits. “All files will be deleted on January 30th. Feel free to download the files you store with UploadBox until this date.”

Update2: Another host, x7.to, shuts down.

Update 3: TorrentFreak has seen evidence that on request PayPal is refunding cash paid to Filesonic over the weekend.

Update 4: FileJungle and UploadStation have disabled all 3rd party downloads.

Update 5: 4shared cancels affiilate program.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

For the past several days, however, many Fileserve users from the UK have noticed they are unable to download files to their computers using the service.

Initially, users got a standard error message that the download could not be completed, but yesterday users got an updated message telling them that their downloads are being blocked by the Internet Watch Foundation (IWF).

Internet Watch Foundation is a self-regulatory body that maintains a list of URLs that point to sexual child abuse and criminally obscene adult content. This list is used by all major UK Internet providers to prevent their subscribers from accessing these files. Unfortunately, however, the blacklist sometimes takes out legitimate services as well.

Fileserve users who try to download a file now see the following message which suggests that upgrading to a premium account will solve the problem, but TorrentFreak has learned that this is not the case. Premium users are also blocked.

Commenting on the issue, Fileserve confirms that a recent addition to the IWF blacklist is indeed causing problems for UK users. Although Fileserve expects that it will be eventually resolved, the file-hoster doesn’t think this will happen on short notice.

“Once again IWF has put Fileserve into watch list until further investigation from their side is done. It is not expected to be lifted within the next few days. IWF for UK is being very thorough in filtering Fileserve users,” the file-hoster informed one of their users.

“Please be reminded that it is not our will to have our UK users suffer from this, our Tech team are now looking into possible solution in getting around this IWF issue,” they added.

At this point little is known about the origin of the problem. It is clear that IWF has started to block one or more Fileserve URLs, but why all downloads are affected remains unknown. This is not the first time that the IWF blacklist has rendered legitimate content unavailable though.

In 2008 the blacklist censored the Wikipedia entry for the album “The Virgin Killer” from the German band Scorpions. This page was reported to IWF by a member of the public, and only after Wikipedia appealed twice did the IWF board decide to take it off the list.

Early January 2009 Archive.org’s Wayback Machine was entirely blocked by a UK ISP because one of the pages was listed on the IWF blacklist. This time the problem was due to conflicting incoming headers at Archive.org, beyond the control of IWF or the ISP.

The above suggests that Fileserve’s problems don’t necessarily have to result from a reconfigured blacklist.

In a week where Internet Censorship is a hot topic, the above is yet another reason why baking censorship tools into law has to be done wisely. In the case of Fileserve the IWF blacklist has rendered their site completely unusable to hundreds of thousands of UK users, something that may cost them if the problem persists.

TorrentFreak contacted the Internet Watch Foundation for a comment, and we will update this article when a response comes in.

Update: IWF confirmed to TorrentFreak that they added a single URL of Fileserve to their list, not the entire domain.

“We received a report of child sexual abuse content hosted on a Fileserve URL which was assessed as criminal under UK law. It is not uncommon to see child sexual abuse content hosted on legitimate cloud storage sites, in our most recent Annual Report we identified this trend as increasing. Our members Virgin Media have been investigating an issue regarding a Fileserve splash page message, the IWF have no control over any of the messages provided by Fileserve,” we were told.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.